Intrawest looks to net $43.6 million from IPO
January 27, 2014
Steamboat Springs — Intrawest hopes to raise about $43.6 million from its initial public offering after covering the expenses of the process, according to documents filed with the Securities and Exchange Commission.
The company, which owns Steamboat Ski Area along with interest in six other resorts, has applied to be listed on the New York Stock Exchange under the symbol SNOW.
The Fortress Investment Group-controlled holding company that owns Intrawest stands to make more than four times as much, as it's offering 12,500,000 shares in the IPO compared to 3,125,000 shares being offered by Intrawest itself.
Intrawest will not benefit from the shares sold by the holding company, which will retain about 65 percent of the total shares depending on how many the underwriting banks claim.
"We have no specific plan for the net proceeds to us from this offering and intend to use such proceeds for working capital and other general corporate purposes, which may include potential investments in, and acquisitions of, ski and adventure travel businesses and assets," Intrawest wrote in filing documents. "No material acquisitions are probable at this time."
In the meantime, the filings state, Intrawest's management likely will invest the proceeds.
In maintaining ownership of more than 60 percent of Intrawest's shares, Fortress will control the company's board and decisions that require shareholder approval.
Intrawest restructured its long-term debt in December — a move it credits with improving the company’s bottom line on a pro forma basis.
Intrawest was a public company before being purchased by Fortress in 2006. It bought Steamboat Ski Area for $265 million in March 2007.
In its SEC filings, Intrawest details how the collapse of the real estate market in 2007 affected its development plans and finances.
"In light of the then prevailing market conditions, we ceased new development activities in late 2009," the filings state. "As a result, we were left with a portfolio of real estate assets, high leverage levels and litigation initiated by purchasers of resort real estate seeking to rescind their purchase obligations or otherwise mitigate their losses."
The filings go on to state that Intrawest thinks it has streamlined its operations through debt refinancings, cost saving initiatives and divestitures.
"As of September 30, 2013, we have divested substantially all of our legacy real estate assets and have settled the majority of litigation claims stemming from our pre-2010 development and sales activities," the filings state. "Although the effects of our pre-2010 legacy real estate development and sales activities on our consolidated financial results will continue in future periods, we expect that these effects will continue to diminish over time."
Real estate activities have been limited to the preservation of core parcels at Intrawest's resorts, according to the filings, and only recently expanded to include planning for future development.